Magnachip said on Thursday that it will be spending 500 billion won in research and development as well as building facilities in South Korea for the next five years.
The chip maker claimed the spending will produce 2 trillion won worth of economic effect locally.
Out of the total, Magnachip will spend 340 billion won in its research centers in Seoul and Cheongju in South Korea.
It will collaborate with local universities and provide 100 million won in scholarship funds a year, the firm said.
Last year, the firm spent 38 billion won in its Gumi factory, where it makes power management chips. It will spend an additional 93 billion won there for the next five years, the firm said.
The factory will manufacture filed effect transistor, super-junction MOSFET for appliances, telecommunication and industrial products, and IGBT.
Magnachip said it may add another 110 billion won to the total spending plan if market conditions for power chips are favorable.
The spending plan also includes benefits for local employees, the firm added.
The labor union of the company and the CEO made a joint statement confirming this.
In March, Magnachip agreed to sell all its shares to Chinese hedge fund Wide Road Capital for US$1.4 billion.
The Ministry of Trade, Industry and Energy is reviewing whether Magnachip has national core technologies and will announce its results by the end of the month.
There has been increasing concerns that Magnachip’s South Korean employees may be unable to hold on to their jobs after the deal passed thorough. There are also worries that the deal may have valuable chip technologies leak to China.
Magnachip’s latest spending announcement is a reaction to those claims.